Discontinued Operations

9 Months Ended

Sep. 30, 2020

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Note 3 - Discontinued Operations

On January 7, 2020, the Company transferred its entire interest in Bright Swallow to Y-Tone (Worldwide) Limited, an unrelated third party, for cash consideration of $2.50 million, pursuant to a formal agreement entered into on January 7, 2020. The Company received the payment on May 11, 2020.

As of September 30, 2019, operations of Bright Swallow were reported as discontinued operations in the accompanying unaudited condensed consolidated financial statements for all periods presented. Accordingly, assets, liabilities, revenues, expenses and cash flows related to Bright Swallow have been reclassified in the condensed consolidated financial statements as discontinued operations for all periods presented.

The following table summarizes the net assets of Bright Swallow at the date of disposal (January 7, 2020):

Cash and cash equivalents	$	1,462,200
Accounts receivable, net		969,841
Advance to suppliers		609,935
Accounts payable		(948	)
Advance from customers		(126,916	)
Accrued liabilities and other payables		(2,553	)
Income tax payable		(85,028	)

Net assets of Bright Swallow upon disposal		2,826,531
Cash received as of September 30, 2020		(2,500,000	)
Loss on disposal of subsidiary	$	(326,531	)

The following table presents the components of discontinued operations in relation to Bright Swallow reported in the condensed consolidated statements of operations:

	For the nine months ended						For the three months ended
	September 30, 2020			September 30, 2019			September 30, 2020		September 30, 2019

Sales	$	-		$	5,118,229		$	-	$	1,632,554
Cost of sales		-			(4,742,345	)		-		(1,627,566	)
Operating expenses		-			(308,165	)		-		(102,264	)
Other expense, net		-			(890	)		-		(622	)
Loss on disposal of subsidiary		(326,531	)		-			-		-
(Loss) Income before income taxes		(326,531	)		66,829			-		(97,898	)
Income tax benefit		-			1,011,532			-		-
(Loss) income from discontinued operations	$	(326,531	)	$	1,078,361		$	-	$	(97,898	)